OTHER (INCOME) EXPENSE



	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2013			2012			2013			2012
Net foreign currency exchange (gains) losses	$	(5	)	$	6		$	118		$	17
Royalty income	(19		)	(10		)	(29		)	(19		)
Financing fees and financial instruments	14			34			27			129
Interest income	(7		)	(4		)	(12		)	(8		)
General and product liability — discontinued products	5			—			8			2
Net (gains) losses on asset sales	(5		)	(13		)	(3		)	(17		)
Miscellaneous	3			24			3			25
	$	(14	)	$	37		$	112		$	129

Net foreign currency exchange gains were $5 million in the second quarter of 2013, compared to net losses of $6 million in the second quarter of 2012. Net losses in the first six months of 2013 were $118 million, which included a net loss of $115 million resulting from the devaluation of the Venezuelan bolivar fuerte against the U.S. dollar, compared to net losses of $17 million in the first six months of 2012. Foreign currency exchange also reflects net gains and losses resulting from the effect of exchange rate changes on various foreign currency transactions worldwide.

Effective February 13, 2013, Venezuela's official exchange rate changed from 4.3 to 6.3 bolivares fuertes to the U.S. dollar for substantially all goods. In the first quarter of 2013, we recorded a $115 million remeasurement loss on bolivar-denominated net monetary assets and liabilities, including deferred taxes, primarily related to cash deposits in Venezuela. We also recorded a one-time subsidy receivable of $13 million related to certain U.S. dollar-denominated payables that are expected to be settled at the official subsidy exchange rate of 4.3 bolivares fuertes per U.S. dollar applicable to certain import purchases prior to the devaluation date. A portion of this subsidy will reduce cost of goods sold in future periods when the related inventory is sold.

Royalty income in the second quarter of 2013 was $19 million, compared to royalty income of $10 million in the second quarter of 2012. Royalty income in the second quarter of 2013 included a one-time royalty of $8 million related to chemical operations. Royalty income is derived primarily from licensing arrangements related to divested businesses.

Financing fees were $14 million in the second quarter of 2013, compared to $34 million in the second quarter of 2012. Financing fees in the second quarter of 2012 included $24 million of debt issuance costs primarily related to the amendment and restatement of our U.S. second lien term loan facility. Financing fees in the first six months of 2013 were $27 million, compared to $129 million in the first six months of 2012. Financing fees in 2012 included, in addition to the second quarter debt issuance costs referred to above, charges of $86 million related to the redemption of $650 million in aggregate principal amount of our outstanding 10.5% senior notes due 2016, of which $59 million related to cash premiums paid on the redemption and $27 million related to the write-off of deferred financing fees and unamortized discount. Financing fees and financial instruments also include the amortization of deferred financing fees, commitment fees and other charges incurred in connection with financing transactions.

Interest income consists primarily of amounts earned on cash deposits. General and product liability — discontinued products includes charges for claims against us related primarily to asbestos personal injury claims, net of probable insurance recoveries.

Net gains on asset sales were $5 million in the second quarter of 2013, compared to net gains on asset sales of $13 million in the second quarter of 2012. Net gains on asset sales were $3 million for the first six months of 2013, compared to net gains on asset sales of $17 million for the first six months of 2012. Net gains on asset sales in 2013 include gains on the transfer of property in Dalian, China to the Chinese government and the sale of property in North America. Net gains on asset sales in 2012 included a second quarter gain on the sale of a minority interest in a retail business in EMEA and the sale of certain assets related to our bias tire business in Latin America.

Miscellaneous expense in the three and six months ended June 30, 2013 includes a charge of $5 million, and in the three and six months ended June 30, 2012 includes a charge of $20 million, related to labor claims in EMEA.